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Shippers face tough investment tradeoffs and, often, planning paralysis in an uncertain market. When deciding between focusing on resilience or redirecting precious resources toward growth and innovation, it can be tough to get off the fence. But several key trends offer opportunities for shippers to grow and become more competitive if they are willing to take the associated risks, keep a steady eye on customers and costs, and move forward.
These five supply chain trends will focus minds and guide big decisions in 2025.
1 Economic Uncertainty is Ongoing
The U.S. is in its fifth year of an economic rollercoaster ride, with ongoing volatility and disruption making critical strategic planning and investment decisions a challenge.
Supply chains engineered for sudden disruption have trouble with low-simmering uncertainty requiring continuous adjustment. Green shoots of optimism seen two to three years ago have largely tapered, leading to cost-cutting and consolidation that hamper innovation and expansion.
Some companies have prioritized operational control to better predict and manage logistics costs. They’re handling more of their own logistics and distribution, shifting production and sourcing to lower-tax countries or states, even leasing and operating truck fleets and warehouse capacity. Others have opted to focus on the core business and outsource supply chain operations to third parties. Most are keen to defer new technology investments and costly organizational or process changes until they have greater clarity.
“They’re being cautious, they want to hold onto whatever cash they have, to weather the storm, figure things out and then chart their strategic course,” says John Williams, senior vice president and head of contract logistics for the U.S. and Canada at global 3PL GEODIS. But after five uncertain, often disruptive years, “wait and see” becomes a default strategy with its own risks.
2 A Stronger Case for Nearshoring and Reshoring
The business case for bringing supply chains closer to key customer markets is compelling. Freight rates remain well above pre-COVID levels, and capacity is tightly managed. China’s role as the world’s factory is declining because of rising costs, plus trade and security frictions. Safer havens in Southeast Asia, Eastern Europe and Latin America suffer from capacity or quality constraints and are now vulnerable to tariffs themselves.
A shorter supply chain reduces product delivery lead times and reliance on safety stock; replenishment is faster, as are response times in the event of disruption. Production closer to home, however, may necessitate more regional distribution centers feeding into local warehouses, with decentralized inventory management and more advanced management systems needed to track and orchestrate flows.
Relocation isn’t simple. Siting and configuring facilities in order to meet two- to three-day ground delivery service demands, based on current and future-state customer and SKU profiles, is hard enough. Relocating equipment and ramping up nearshored production with a new foreign partner demands a full, upfront understanding of logistics capabilities, labor availability and skill levels, infrastructure constraints, business customs and the regulatory framework.
3 How to Approach Sustainability
Supply chain sustainability remains top of mind for most companies, for practical reasons. With a narrow focus on carbon emissions and materials waste, shippers can lower top-line costs, boost performance and avoid reputational “own goals.”
Implementing a meaningful sustainability program requires extensive data collection — end to end, both internal and external, and from suppliers and logistics vendors — in order to establish a baseline. Further, supporting data on vehicle and equipment specifications, mileage estimates or emissions offsets must be verified. All must be tracked over time to measure progress.
In the warehouse, an in-depth understanding of operations and sustainability principles is essential, from cartonization and packaging for dimensional weight optimization, to robotics, facility lighting, heating and power generation, battery and clean fuel technologies in transportation.
The learning curve is steep when it comes to training. Expanding skilled headcount in this highly specialized area is expensive; talent is often hard to find.
4 AI Adoption is Here
Artificial intelligence (AI) and machine learning (ML) bring needed visibility, speed and precision to the supply chain. Both are already integrated, to varying degrees, into most warehouse, order or inventory management systems and cloud-based freight-tech platforms.
Until now, AI has been applied to specific tasks such as routing and load planning, rate analysis and carrier selection or, in distribution, dynamic slotting and wave optimization. New iterations promise to take data processing and analytic capability to new levels.
Over the term of a typical warehouse contract, collection of granular, real-time order and shipment data opens up exciting opportunities for demand forecasting and labor planning, dynamic inventory replenishment and automated exception response.
GEODIS executive vice president and Americas region CIO Pal Narayanan sees another important benefit: Routine data collection over time will preserve a far more detailed record of order, shipment, customer, market and situational data — in effect preserving a company’s historic knowledge across management or personnel transitions. “Roles, responsibilities and people change,“ he says. “What happens when the senior employees leave or retire? Until now, their knowledge has walked out the door with them.”
5 Next-Gen Technology to Adapt for Scale
As software delivers more and better data at scale, a key concern for shippers is whether physical assets will be in place as needed, with flexibility incorporated to cost-effectively scale up or down with demand.
The warehouse is a particular concern because of the relatively long contract terms, the time needed to build working relationships and fine-tune services, and the difficulty of moving operations.
Shippers looking to grow want optimal utilization today, with the capacity for expansion later. That begins with greater height clearance, heavier foundations, and flat, seamless floors in order to accommodate heavy equipment and vehicles. They may also be looking for the ability to install rooftop HVAC, power and parking, in order to free up space inside; and deeper truck courts and loading bays outside, with onsite trailer storage.
Efficient, flexible operations are equally critical. Open-source, cloud-based solutions from optimization to robotics — offered à la carte, via subscription — deliver access to cutting-edge technologies as needed, and at relatively low cost.
GEODIS Future-Proofs the Supply Chain
GEODIS, founded in 1904 in Le Havre, France, as a rail haulage service, is today a global third-party logistics (3PL) provider with nearly 50,000 employees, more than 1,000 distribution sites and approximately 103 million square feet of warehouse space across nearly 170 countries, serving more than 81,000 clients. Its four strategic business lines include global freight forwarding, global contract logistics, distribution and express transport, and road transport.
The company operates more than 230 coastal and inland sites in North America, including over 160 in the U.S., offering flexible, scalable facility space in GEODIS-owned or outsourced space, and facilities designed, built and operated in collaboration with clients.
Distribution services extend to omnichannel fulfillment, reverse and project logistics, all powered by a full suite of cloud-based optimization and automation solutions, including warehouse, inventory and order management systems, developed in-house. Custom solutions include vendor-managed inventory (VMI), robotics, order-to-cash workflow management and white-glove services.
GEODIS’ eco-design methodology delivers detailed carbon assessments and certified reductions in, or avoidance of, CO2 emissions across the full-service life cycle, plus consulting and software solutions to minimize materials waste and energy consumption in buildings, equipment and transport flows.
GEODIS incorporates AI, machine learning and deep learning throughout its service offerings, from route and inventory management optimization, customer service chatbots and autonomous mobile robotics, to fraud detection and contract management.
Resource Link: https://geodis.com/us-en
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